Air France, Delta seek to buy out Branson of Virgin Atlantic


The airlines, which are both members of the powerful SkyTeam alliance, have appointed Goldman Sachs to advise them on a potential approach.

Sir Richard, whose stake in Virgin Atlantic is valued by analysts anywhere between £500m and £1bn, has hired Deutsche Bank to examine its strategic options, as The Daily Telegraph disclosed in November. Singapore Airlines owns the remaining 49pc, after buying it for £600m in 1999.

The founder of Virgin was forced to review the airline’s position in the wake of British Airways’ £5.2bn merger with Iberia and their transatlantic pact with American Airlines. The deal, which created the International Airlines Group, was one that Sir Richard bitterly opposed.

Global airlines have been moving to consolidate and forge partnerships to ride out the turbulence of the financial downturn and other factors such as soaring oil prices.

But Virgin has failed to become a member of any of the big airline alliances. The review of Virgin Atlantic has several potential outcomes. They include a codeshare deal, joining an alliance, the sale of all or part of Singapore’s stake to a third party, and for Sir Richard to relinquish majority control as part of a bigger airline transaction.

Speculation has centred whether it will join SkyTeam the Star Alliance, featuring Lufthansa and United.

Etihad, the carrier owned by the ruling family of Abu Dhabi, is also thought to be interested in buying Sir Richard’s stake. James Hogan, chief executive of Etihad, is thought to have written to Deutsche Bank to express an interest in a potential deal. Etihad has hired Bank of America Merrill Lynch to advise it.

Last year Air France and Delta joined to invest €1.5bn (£1.3bn) in Japan Airlines, the ailing Asian carrier. Japan rejected the approach in favour of remaining in the Oneworld airline alliance with American Airlines and British Airways.